ECB leaves interest rates unchanged

BERLIN – The European Central bank has left its key interest rate unchanged at 1.5 per cent.

Many economists think the bank has only postponed a cut to stimulate the eurozone’s economy, which shows signs of a slowdown. They think a cut will come later this year.

Markets are now waiting to see if bank President Jean-Claude Trichet will use his last news conference Thursday before retiring to announce new credit offerings to steady Europe’s shaky banking system.

Banks are threatened with losses from a potential default on government debt by Greece since some of them hold those bonds. That has made banks afraid to loan money to each other for fear they will not be paid back.

Some banks are struggling to fund their day-to-day operations and remain dependent on last-resort loans from the ECB.